Income Stocks in a Sell Everything Moment

The income stock selloff that began in mid-September has picked up steam this month. The Dow Jones Utility Average is now underwater by –9.42 percent year-to-date including dividends, and nearly -19 percent since almost hitting a new all-time high last month.

That’s for sure a massive outperformance of the S&P 500, which has resumed its year-long slide and is down almost -24 percent for 2022. And with the exception of oil and gas stocks, utilities are also well ahead of almost everything else in the income investing universe, particularly bonds with the 10-year Treasury note yield again pushing towards 4 percent.

But it is clear that even utilities are no longer resisting overall stock market weakness. And with the Federal Reserve seemingly determined to trigger a global recession in the cause of quelling inflation, it’s less and less likely we’ve seen the maximum damage or duration of what’s rapidly evolving into a real bear market.